One easy way to get a sense of the level of competition in a market is to look at whether one or a few firms hold most of the market. Here\’s are market shares for U.S. web search. Since 2007, Google has been rising from about half to about two-thirds. Microsoft has also see a rise, while Yahoo has been falling. The figure is from
The figure is from Dan Frommer\’s article, \”Google has run away with the web search market and almost no one is chasing,\” at the Quartz website on July 25, 2014. Frommer reports that Google had $37 billion in revenue from its websites last year, which is mostly revenues from web search. Potential entrants to the web search industry face at least three problems.
- First, most users like what Google web search offers just fine.
- Second, it\’s a costly venture to launch a web search company.
- Third, Google controls the Chrome internet browser that uses Google as its default for web search, and Android, one of the leading operating systems for mobile devices, and most users just tend to go with default options in their software. Thus, it may take some disruptive web search innovation to challenge Google\’s position. Of course, potential entrants know that Google is already researching possible innovations, too.